Breakingviews - Germany’s Caribbean coalition will shake Europe

LONDON (Reuters Breakingviews) - Sunday’s election will turn Germany into Jamaica. A coalition resembling the colours of the Caribbean country’s flag – black for Chancellor Angela Merkel’s conservatives, yellow for the pro-business Free Democratic Party (FDP), plus the Greens – is the only viable option for a majority in the German parliament. Europe’s largest economy is facing a period of weak and unstable government.

Christian Democratic Union (CDU) party leader and German Chancellor Angela Merkel leaves the stage after her speech after the announcement of poll results in the German general election (Bundestagswahl) in CDU headquarters in Berlin, Germany, September 24, 2017. REUTERS/Fabrizio Bensch

Though Merkel will return for a fourth term, her Christian Democratic Union and its current coalition partner, the Social Democrats (SPD), suffered their worst electoral result in postwar history. The far-right Alternative for Germany (AfD) more than doubled its share of the vote compared with 2013 and is now the country’s third-largest party. The SPD will lick its wounds in opposition. So Merkel will need to team up with smaller parties.

The FDP’s return to parliament means that a group with semi-eurosceptic views is likely to be a core pillar of the next government. Party boss Christian Lindner has repeatedly called for throwing Greece out of the euro zone. He has also said that he would not join a coalition that pushes for policies going “in the direction of financial transfer on the European level, be it a euro zone budget or a banking union”.

Merkel can’t form a government with the FDP alone, and including the Greens will provide a bit of a counterbalance. Yet as the chancellor has no credible alternatives and both small parties gained votes, they will seek to maximise their influence. The colourful coalition’s life expectancy is an open question. The FDP and the Greens are at odds about issues such as reform of the euro zone, climate change and free trade.

Merkel’s Bavarian sister party, the Christian Social Union (CSU) is also likely to play up. After a crippling defeat it will be obsessed with the 2018 election in Bavaria. CSU voters are conservative and distrust the Greens. Hence the CSU has an incentive to be awkward in Berlin.

Hammering out a three-party alliance could take many months. This will delay – if not derail – reforms to the euro zone envisioned by Emmanuel Macron. The French premier is due to spell out his vision on Tuesday. He will find a German government that is much harder to sway.

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